The Longest Four Hours
On September 27, Gary Gensler, the man at the helm of the SEC, faced an exhausting marathon of inquiries from the House Financial Services Committee. If you thought your last family dinner was awkward, you haven’t seen anything until you witness Gensler fielding a four-hour interrogation about his agency’s strategies and missteps. Let’s just say, it was a heavy dose of tough love from Congress!
Representative Mike Flood and SAB 121
Among all the fiery exchanges, one stood out: Representative Mike Flood came charging in like a lawyer on an episode of ‘Law & Order’. Flood’s spotlight was firmly fixed on the SEC’s Staff Accounting Bulletin (SAB) 121, issued in March 2022. This bulletin was intended to wrap its legal arms around accounting for crypto assets held by banks and platforms—yes, the ones we keep reading about kryptonizing the financial world.
The Problem with Precedents
In a dramatic twist, Flood made it clear that the SEC didn’t consult prudential regulators like a Netflix user skips through recommendations. He pointed out that the Financial Accounting Standards Board (FASB) had not released any crypto custody-related standards before the SAB hit the press. Storming forward, Flood noted that FASB only introduced related guidelines after SAB 121’s debut. I mean, come on, could they at least consult some experts next time?
The Defense
When Flood challenged Gensler about whether existing rules grounded the SEC’s justification for issuing SAB 121, Gensler clarified that there was a 2009 regulation regarding digital asset custody. “We have a rule on that!” he proclaimed with all the enthusiasm of a kid with a new toy. Flood quickly retorted that the SEC had no clear rules about digital assets at the time of the bulletin’s release. Ouch!
More Questions Than Answers
Flood’s final point was like a mic drop—were they just winging it? According to him, the SEC’s flimsy rationale for SAB 121 overlooks the basic fact that no solid guidelines were in place when it was issued. The uncertainty loomed large, which left the whole crypto community scratching their heads.
Pushback from All Sides
Surprising no one, SAB 121 faced criticism as fierce as your Aunt Margie’s Thanksgiving turkey. Commissioner Hester Peirce blasted the rules like a bemused commentator, warning that it might be more regulation masquerading as guidance. Not to be out-shined, a group of five senators, led by the ever-passionate Cynthia Lummis, penned a letter to Gensler, arguing the bulletin was putting crypto holders in an even stickier situation. This is practically the double feature of Congressional dissension!
The ETF Dilemma
In a lighter yet still crucial back-and-forth, four members of the Financial Services Committee handed Gensler a letter insisting he ease up on Bitcoin ETF approvals. Spoiler alert: This topic was awkwardly brushed aside like unappetizing salad at a BBQ. Meanwhile, Gensler assured the committee they were still ‘actively considering’ the pile of Bitcoin applications, but one has to wonder: how long until they’re off the consideration table?
Conclusion: The Final Curtain?
As the curtain dropped on this riveting hearing, questions lingered thick in the air about the SEC’s direction and Gensler’s final say in crypto regulation. With a mix of serious critiques and humorous asides, it’s a wild time to be alive in the ever-churning world of cryptocurrency—just make sure your seatbelt is fastened because this ride is far from over!
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